Landlords drove a 60% increase in remortgaging to release equity in 2025 to improve buy-to-let (BTL) properties, Paragon Bank has revealed.

The bank’s analysis of industry data found that £2.37bn was withdrawn in equity for property improvements across the year, up from £1.48bn recorded in 2024.

Paragon stated that the 2025 total was across 14,817 mortgages, resulting in each loan averaging almost £43,000.

The bank stated that the increase in borrowing to fund BTL property improvements correlates with the increased focus on the Renters’ Rights Act. This suggests that landlords have invested to ensure they are compliant with forthcoming elements of the act, such as the Decent Homes Standard.

The findings come after Paragon’s earlier research found that 44% of landlords are actively targeting homes in need of improvement and are spending an average of £8,500 on the property. This includes installing new boilers, fitting new bathrooms or kitchens, or addressing damp or structural issues.

Managing director of mortgages at Paragon Bank, Louisa Sedgwick, stated: “These figures reveal how landlords are strategically structuring their BTL borrowing, leveraging the considerable amounts of equity they have built across their portfolios to finance property improvements.

“The timing of the increase in equity withdrawn for property improvements suggests that the Renters’ Rights Act is a driver, but landlords will also benefit from likely increases in the value of their investments and the additional appeal to tenants.

“Our earlier research revealed that almost six in 10 landlords don’t get their EPCs assessed after undertaking works to make their properties more energy efficient. Not only could this lead to ambiguity around compliance with any new Minimum Energy Efficiency Standards but could also mean that they’re missing out on preferentially priced green finance products.”

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